Not sure what Raptorduck has found, but I’ve been closely watching La Jolla for the last several years. Here are a couple insights that I can give.
1) Lots of stuff has come on the market, and then after about six months been taken off without selling. Seems that plenty of people are interested in selling, but will wait for the market to recover. (I suspect that most of them don’t have any idea how long it will be but I’ll leave that for another thread.) Consequently, I do think that in high end areas there is a significant backlog building up, even if it isn’t on the MLS.
2) Some people get lucky, but most don’t. By that I mean that lots of houses just sit on the market. And sit and sit. BUT, every couple of weeks something goes pending that causes me to ask, WTF was that person thinking. The down side of this to those of us waiting for the high ends to come down is that then there is a new comp to justify higher prices. And from what I’m seeing, most sellers in La Jolla are hoping for prices to still be at peak 2005 prices. Alternatively, sometimes you see something go at a decent price, but only occasionally. Likewise, some places sell at full asking price, but some sell at pretty significant discount from what they originally asked. It’s a very mixed bag.
3) Because La Jolla (and other high end areas) are so different house to house, it is very difficult to determine how the market is doing. In areas with tract housing, where the houses are all about the same, it’s much easier to do comparisons. But in La Jolla, it’s really hard to do that. Consequently, it’s really hard to tell how much of a drop in prices we have had. (The flip side of this is that it is easy to selectively pick comps that justify high prices, or to selectively pick comps that justify falling prices.)
4) The number of buyers has significantly dried up. Particularly since the start of the credit crisis when jumbo loans suddenly got hard to find. From the couple of open houses, I’ve been to lately I’d have to say that many are hoping for a nice bounce in the Spring of 2008. I don’t know what will happen then, but I do think that spring 2008 will be crucial to determining how the rest of this downturn goes. If enough sales can be made in spring 2008, then the high end areas will hold more than lots of people think. But if spring 2008 is dead on arrival, the pressure from all those waiting for a housing rebound will start to drive things down in a serious way.
